Basically you cannot do it as you intended. What does the template contain, that cannot be used in a conventional forwarding of the original?
See the difference with the following. 

Sub SendNew(Item As Outlook.MailItem)
Dim objMsg As MailItem
Dim olInsp As Outlook.Inspector
Dim wdDoc As Object
Dim oRng As Object
Dim Answer As Long

    MsgBox "In SendNew"
    'Set objMsg = Application.CreateItemFromTemplate(Environ("APPDATA") & "\Microsoft\Templates\Test.oft")
    Set objMsg = Item.Forward
    With objMsg
        Set olInsp = .GetInspector
        Set wdDoc = olInsp.WordEditor
        Set oRng = wdDoc.Range
        oRng.collapse 1
        oRng.Text = "- - - - - - - - - - - - - - - - - - - - " & vbCr & "." _
                    & vbCr & "." & "From:  " & Item.SenderEmailAddress & vbCr & "." & vbCr & "." _
                    & vbCr & Item.Subject & vbCr & "." & vbCr & "."
        .Subject = "FW: " & Item.Subject
        .Recipients.Add "me AT test.com"        'Send to selected person
        MsgBox "Before .display"
        .Display
        MsgBox "After .display"
    End With
    Answer = MsgBox("sendNewNunn. Send Message?", vbQuestion + vbYesNo + vbDefaultButton2)
    If Answer = vbYes Then objMsg.Send
    Set objMsg = Nothing
    Set olInsp = Nothing
    Set wdDoc = Nothing
    Set oRng = Nothing
End Sub
If this doesn't work for you, can you post your template?